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Enough liquidity in market: Indian Bank Chief

Amid speculation that the RBI might increase the CRR, public sector lender Indian Bank said there was enough liquidity in the market and it was well poised to handle another hike.

business Updated: Jun 05, 2007 16:39 IST

Amid speculation that the Reserve Bank of India might increase the Cash Reserve Ratio (CRR), public sector lender Indian Bank on Tuesday said there was enough liquidity in the market and it was well poised to handle another hike.

"The banking industry is mature enough to confront yet another hike in CRR rates should the RBI take such a step. In lieu of lower inflation rates, another hike in CRR is not likely. However, the banking industry in India is mature enough to face any such measures," Indian Bank Chairman and Managing Director Sundara Rajan told PTI.

Following a series of monetary tightening measures by the Reserve Bank, inflation has come to controllable levels, Rajan said.

The call rates have also touched lower levels reaching nearly 0.50 per cent on Monday and there is enough liquidity in the market, he added.

Rajan said the bank's prime lending rate was presently at 12.50 per cent, "which is in line with market trends."

With call rates touching lower levels on Monday combined with enough liquidity in the system, "we hardly see any need to hike interest rates," he said.

Indian Bank has pegged credit growth at 25 per cent and deposit growth at 20 per cent for FY08.